Organic Fruits and Vegetables Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Organic Fruits and Vegetables Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The organic fruits and vegetable market is expected to record a robust CAGR of 6.9% during the forecast period (2022-2027).

The COVID-19 pandemic has positively impacted the market due to growing awareness of healthy and nutritional diets. Therefore, this led to a surging demand for organic fruits and vegetables globally. The straight relation of organics with nutrition and health is one of the main reasons that have resulted in a surge of interest for products that benefit consumers, including functional food and vegetables. The industry may witness increasing demand for food products grown organically.

The increasing demand for organic fruits and vegetables is primarily due to their increased production and rising global consumption. However, organic fruits and vegetable supply is limited in relation to their demand due to their high production cost. Despite the high price for organic fruits and vegetables, consumers are willing to pay more for organic foods due to less use of pesticides and high nutritive value. Therefore, it is expected to boost the sales of organic fruits and vegetables.

Asia-Pacific is the fastest-growing segment due to a growing trend among consumers to support local businesses, along with rising demand for locally produced products in response to food security issues. Since the health crisis and food scarcity have a long-term impact on consumer demand, the demand for organic products is increasing rapidly in the region. High disposable income and high spending capacity on health and related products enable the sales of organic food products in North America.

Due to the constantly increasing demand for organic food and limited supply in relation to the demand, the area under organic farming has increased worldwide. According to FiBL, the organic area share of the total farmland in Europe increased from 3.12% in 2018 to 3.44% by 2020. Similarly, the organic area share of the total farmland in Latin America increased from 0.99% in 2016 to 1.06% in 2018. The rise in demand for organic products is driving farmers across the world to cultivate crops, which include fruits and vegetables in this segment. For instance, according to a survey, in United States, organic farms are 35% more profitable than the average farms. The amount paid to organic farmers can range from 29-32% above the non-organic prices. The possibility of farmers switching from conventional farming to organic farming is made easier with the regional regulatory bodies providing the necessary funds to support the switching cost. The constantly rising demand serves as an opportunity for supermarkets and food store chains to diversify and widen their offerings of organic food at more competitive prices.

North America is the largest market for organic fruits and vegetables, followed by Europe and Asia-Pacific. As of 2018, around 39,763 hectares of the area were available in Mexico for the organic farming of fruits and vegetables, which accounted for around 3% of the total agricultural land available for the cultivation of fruits and vegetables. Owing to the higher prices and consumers’ lack of perception of the difference between organic and conventional products, the demand for organic fruits and vegetables in Mexico is not high. Though the presence of these products in modern retail has increased in recent years, this can be related primarily to the increasing interest of affluent consumers and the growing middle-class population level in the country, which may drive the market over the forecast period.

According to the Canada Organic Trade Association, consumers from Quebec and British Columbia are the leading spenders on organic groceries in the country, with consumers from British Colombia expected to substantially increase their spending in comparison to Canadians overall.

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